The Role of Corporate Regulators in Australia: The ATO, ASIC, APRA & More

Australia is home to some of the most stringent corporate regulation in the world. Companies are subject to a range of strict laws that regulate everything from complex taxation obligations to even how a directors’ meeting is called.

Directors must follow statutory ‘directors duties’, financial advisors must follow the rules of their licence to the letter and companies must ensure they lodge all paperwork with their applicable regulator accurately and on time.

Since the Financial Services Commission found significant levels of misconduct in banking and financial sectors, regulators now keep a more watchful eye on the actions of corporate entities – especially in the ways that they interact with the public.

If you’re running a company, it’s important that you know exactly what government departments form Australia’s regulatory landscape. So below, we’ll look into the role of the most important Australian corporate watchdogs in more detail.

Australian Securities & Investments Commission

The Australian Securities & Investments Commission (ASIC) is Australia’s primary corporate regulator. Set up under the Australian Securities and Investments Commission Act 2001 (Cth), the agency administers both company and financial services laws designed to protect the public. This includes creditors, investors and consumers.

Their primary role is to ensure the integrity of Australian corporate and financial markets, while maintaining and improving the performance of the country’s financial system. Their job is to administer and enforce company law, such as obligations under the Corporations Act 2001, while also making information about companies to the public.

The agency has announced a number of strategic priorities it intends to focus on up until 2026, including:

• Sustainable finance (helping investors make ethical and environmentally friendly investments while managing climate change risk)
• Product design (minimising the risk that consumers face when investing in financial and credit products
• Technology risks (addressing and minimising risks associated with technology such as online scams)
• Retirement decision-making (helping consumers plan for retirement, and therefore specifically focusing on financial advice, superannuation and managed investments)

Australian Tax Office

The Australian Tax Office (ATO) is Australia’s primary revenue collection agency, responsible for administering Australia’s taxation and superannuation regimes. They collect income tax, company tax, goods and services tax (GST) and other taxes levied by the Federal Government. They are also responsible for other initiatives such as the Australian Business Register and the HELP (Higher Education Loan Program) Scheme.

The ATO also have a critical role when it comes to investigation and compliance. The agency investigates alleged corporate misconduct and prosecutes those companies who they say have violated the law. For example, the ATO is leading a task force known as Operation Protego, which is investigating approximately $850 million in possibly fraudulent GST payments.

During tax time, the ATO also announce their priority areas – i.e. issues that they’ll be focusing on when the public is processing tax returns. For example, the ATO have announced that they’ll be focusing on record-keeping, work-related expenses, rental property income and capital gains from property, shares and crypto assets.

Australian Prudential Regulatory Authority

The Australian Prudential Regulatory Authority (APRA) is, as the name suggests, the country’s prudential regulator of the financial services sector. The authority oversees banks, building societies, insurance companies, superannuation funds and friendly societies.  “Prudential regulation” simply refers to the safety and integrity of financial bodies, so that the public can maintain confidence that they meet their obligations.

APRA’s primary task is to safeguard the financial interests of individuals who trust their money with these types of institutions. Their regulation assists to keep our financial sector stable and reputable, by helping ensure financial risks open to consumers are identified and managed to the greatest possible extent.

Like ASIC, APRA also overlooks the activities of Australia’s financial institutions and will take the actions necessary to protect the interests of the public. This includes taken enforcement action where necessary.

Australian Securities Exchange

The Australian Securities Exchange (ASX) is a listed exchange group, where listed companies are able to offer shares to the public. It administers the ASX Listing Rules, which governs how companies can list on the ASX, launch an Initial Public Offering (IPO), and the rights and obligations of a company are when listed. The ASX will also administer the ASX Settlement Operating Rules, which govern the ASX market settlement process.

The ASX can suspend a listed company, and even delist them entirely, when enforcing the ASX Listing Rules. They cannot commence proceedings under the Corporations Act 2001. However, they can refer any breach of the ASX Listing Rules to ASIC to consider potential sanction and – indeed – are required by the Corporations Act 2001 to refer some matters to ASIC for investigation.

Any company listed on the exchange should seek the help of a ASX financial compliance specialist to ensure they meet their obligations.

Australian Financial Complaints Authority

The Australian Financial Complaints Authority (AFCA) is a dispute resolution body that consumers may approach if they are unable to resolve complaints with financial services institutions such as banks. It was established relatively recently in 2018, replacing other complaints bodies including the Superannuation Complaints Tribunal, the Credit and Investments Ombudsman and the Financial Ombudsman Service. All financial services providers must be a member of AFCA.

AFCA is the next stage of dispute resolution when consumers cannot resolve the dispute directly with the financial provider themselves. If the dispute can’t be resolved (or if the outcome is not satisfactory to the consumer), it is only then that they can lodge a complaint with AFCA.

In determining disputes, AFCA has a set of rules it must follow. These rules require the Authority to determine disputes fairly, impartially and independently. They also must be effective and timely, but they are not bound by strict legal rules of evidence. They do not have to conduct a formal hearing (like a court), but they must give all parties a chance to provide information and submissions.

Australian Competition & Consumer Commission

The Australian Competition and Consumer Commission (ACCC) is tasked with ensuring that companies across the country comply with national consumer laws. This includes laws around competition, fair trading and consumer protection. The ACCC is able to commence legal proceedings against a company when it believes that federal consumer protection laws have been violated including, for example, if they believe that a company has engaged in misleading and deceptive conduct towards consumers.

Takeovers Panel

The Takeovers Panel is the main dispute resolution body that deals with disputes around takeovers and transactions regarding corporate control. Members of the Panel typically constitute takeover specialists, including lawyers, accountants and bankers. Their main goals are to minimise court litigation, takeover costs and overall help achieve the objectives set out in takeovers legislation.

The Panel has a broad range of powers to help it achieve its goals, including the power to make orders to stop unacceptable circumstances form coming into fruition in relation to takeovers.

Fair Work Ombudsman

The Fair Work Ombudsman (FWO) is Australia’s workplace relations watchdog. They are the primary regulator of employee-employer relations in Australia and exist to help both parties understand their rights and responsibilities when it comes to navigating employment issues. The FWO can give advice on correct rates of pay, how various forms of leave works, final pay, the National Employment Standards and resolving workplace conflict.

The Ombudsman also plays a critical role in investigating and prosecuting breaches of workplace laws. Some of their recent priorities have included investigating breaches in the hospitality and agriculture sectors, sham contracting, universities and contract cleaning. The agency has commenced proceedings against both companies, individual directors, accountants and human resources managers.

Foreign Investment Review Board

The Foreign Investments Review Board (FIRB) is a body that provides advice on foreign investment to the Government. They scrutinise proposals made by foreign entities, such as foreign companies, who want to make an investment into Australia. The Government has a technical foreign investment policy, so the FIRB is the specialist organisation tasked to advise the Government on whether the investment should be allowed to occur.

Looking for further information about an Australian corporate regulator?

Get in touch with the corporate experts here at 2account. Our ASX, AFSL and accounting experts can help you navigate various interactions you have with Australian corporate regulators, including compliance with ASX Listing Rules and the term of your Australian Financial Services Licence.

If you’re looking for assistance in this area, get in touch with our team today.